The S&P 500 fell on Tuesday, as we continue to see a lot of noisy sideways action, and ultimately, we are in a bit of a holding pattern. It is worth noting that the floor continued to hold on Tuesday.
S&P 500
The S&P 500 has fallen to kick off the trading session on Tuesday, but it looks as if the 6800 level is going to continue to be an area of interest. I do think that traders will continue to see this as a buy on the dip type of scenario. We are seeing a little bit of a risk-off type of behavior in the market at the moment, and given enough time, I think we have a situation where we see this market eventually break back towards the 7000 level as an area of importance and significant resistance.
The PCE inflation report later this week will have a major influence on what happens next, and it’s probably worth noting that there is a bit of an artificial intelligence exhaustion trade at the moment. We are starting to see money flow into places like utilities. This means that people are still willing to buy, but not in the usual “highflyers” that a lot of people are used to seeing rally.
Rotation and Market Structure
The Federal Reserve is still a question at this point, and this market has recently seen a rotation out of big tech, but it is probably only a matter of time before we continue to see those companies rise as well. We are looking at a 6800-level floor and a 7000-level resistance barrier. I think we’re just stuck in this pattern, and as we have tested support and so far, it’s held, I’m actually looking for short-term buying opportunities in this market, as the overall action continues to see resilience, but also lack of momentum.
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